The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.30 per share on January 1, 2017. The remaining 20 percent of Devines shares also traded actively at $7.30 per share before and after Holtzs acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devines underlying accounts except that a building with a 5-year future life was undervalued by $64,500 and a fully amortized trademark with an estimated 10-year remaining life had a $84,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $333,500.

Following are the separate financial statements for the year ending December 31, 2018:

At year-end, there were no intra-entity receivables or payables.

a) Prepare a worksheet to consolidate these two companies as of December 31, 2018.

b) Prepare a 2018 consolidated income statement for Holtz and Devine.

c) If instead the noncontrolling interest shares of Devine had traded for $5.82 surrounding Holtzs acquisition date, what is the impact on goodwill?

Devine, Inc. Holtz Sales Cost of goods sold Operating expenses Dividend incone Corporation s (674,8) 233,880 275,089 16,889 (348,258 166,689 B3, 258 S 182,88) S (91,688) (483,588) Net income Retained earnings, 1/1/18 Net income (above) Dividends declared s (783,66) (182,888) 70,809 (91,888) S (895,880) Retained earnings, 12/31/18 Current assets Investment in Devine, Inc Buildings and equipment (net) Tradenarks S (474,588 S 196,589 423,008 $ 8e,589 584,600 825,888 s 1.825,8 Total assets Liabilities Conmon stock Retained earnings,12/31/18 (above) s (610,8e) (226,888) (1ee,888) (328,669) (895,600) Total liabilities and equities S (1,825,80) (8e, 5e9)